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Search continues in inlet for natural gas

Posted: Thursday, June 19, 2003

By TIM BRADNERMorris News Service - Alaska

ANCHORAGE Cook Inlet petroleum operators are stepping up their search for new natural gas deposits.

Unocal Corp. will begin drilling its Happy Valley No. 1 exploration well in late June at a location seven miles southeast of Ninilchik. The company will use Nabors Alaska Drilling Co. Rig 129 to drill the well.

Unocal drilled three unsuccessful exploration wells in the same area in late 2001 and early 2002, all searching for gas. There were shows of gas detected in the wells but none of them capable of commercial production, according to Unocal spokesperson Diane Dunham.

The new Happy Valley well is on surface land owned by Ninilchik Native Corp., with the subsurface owned by Cook Inlet Region Inc.

In a separate development, Marathon Oil Co. will drill two extended-reach exploration wells in Cook Inlet later this year using the Nabors Rig 273 that is now completing a test of the ConocoPhillips Alaska Inc. Cosmopolitan prospect, also in Cook Inlet.

A large drilling rig is necessary to drill extended-reach wells, which require drilling at high angles from the surface to reach an underground target sometimes several miles from the location of the rig.

Marathon Kasilof South No. 1 will be drilled first, and No. 1L will be drilled as a "sidetrack" to No. 1 to reach a different bottom-hole location. Drilling operations are expected to begin in October and continue into early 2004, according to documents Marathon has filed with the state Division of Oil and Gas.

Drilling operations are expected to take about four months. Testing is to be completed by Feb. 1, 2004, according to the information filed with the division.

The wells will be drilled from an onshore surface location near Kasilof and will test natural gas prospects about three miles out in the nearby inlet.

The company will use an old exploration pad built by Union Oil of California, now Unocal Corp., in 1964. Union drilled two wells from the location in a search, both of them unsuccessful. The surface pad is on South Cohoe Loop Road four miles north of the Sterling Highway.

Concerns are increasing over the long-term supply of natural gas in Cook Inlet, but Marathon and Unocal have had recent success in finding new gas reserves.

The two companies are now developing a gas reserve discovered near Ninilchik, and a pipeline is nearing completion that would connect the gas to the existing gas pipeline network near the Kenai gas field.

Marathon and Unocal have declined to release reserve estimates in the new Ninilchik field. Marathon owns 70 percent of the Ninilchik deposits, and Unocal owns 30 percent.

In addition, Marathon drilled a new exploration well at Clam Gulch, near the Ninilchik gas discoveries.

The results of that well are still being evaluated, according to John Barnes, Marathon's manager for Alaska.